The Allen Company has the following information for the Assembly Department for the month of October: Materials purchased $ 45,000 Materials used 49,000 Direct labor 30,000 Actual manufacturing overhead 56,000 Cost of goods completed and transferred to the Finishing Dept. 125,000Overhead rate is 200 percent of direct labor costs. Allen Company uses a process costing system for the Assembly Department.The journal entry to record materials purchased would include a a. debit to Materials Inventory for $49,000. b. credit to Accounts Payable for $49,000. c. debit to Materials Inventory for $45,000. d. both "debit to Materials Inventory for $49,000" and "credit to Accounts Payable for $49,000".
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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The Allen Company has the following information for the Assembly Department for the month of October:
Overhead rate is 200 percent of direct labor costs.Materials purchased $ 45,000 Materials used 49,000 Direct labor 30,000 Actual manufacturing overhead 56,000 Cost of goods completed and transferred to the Finishing Dept. 125,000
Allen Company uses aprocess costing system for the Assembly Department.Thejournal entry to record materials purchased would include aa. debit to Materials Inventory for $49,000.b. credit to Accounts Payable for $49,000.c. debit to Materials Inventory for $45,000.d. both "debit to Materials Inventory for $49,000" and "credit to Accounts Payable for $49,000".
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